Australian miner Troy Resources Inc yesterday announced a suspension of mining at its Karouni, Region Seven operations in the wake of an accident last week that resulted in the death of a geologist.
This action will see hundreds temporarily out of work even as the company raises concerns about the restart of its operations and the viability of operations at a key section of its mine site.
The move by the company appeared to have taken the government by surprise. There was no word up to press time from the Ministry of the Presidency, Ministry of Natural Resources or Ministry of Social Protection on the move.
In a statement, the company explained that following the death of a worker on site, Minister within the Ministry of Social Protection Keith Scott issued a stop order directing “that there be a cessation of all mining activities with immediate effect until further notice from [the] Ministry.”
This order was issued before the completion of investigations which had been launched by the Guyana Geology and Mines Commission (GGMC), the Guyana Police Force, the Ministry of Social Protection and the Company itself.
These investigations have since concluded and the company has committed to meeting with the named entities in the coming days.
Meanwhile in keeping with the October 10 order Troy ceased all mining activities and as a consequence all milling activities since the exhaustion of ore stockpiles during the recent wet season meant that there were negligible quantities of ore available for processing.
Highlighting that the Company does not know when, or if, approval will be given to resume mining activities, Troy has directed that all site employees stand down with the exception of those undertaking security duties, exploration activities and those involved in preparing the processing plant for a full shut-down.
The company maintained that “employees are not dismissed and can resume their normal duties if, or when activities on-site are able to resume” but has reminded that under Guyanese Law, a Company is permitted to stand down the workforce without pay for up to six weeks in certain cases.
“Troy will not reinstate any of the laid-off employees nor recommence mining and processing activities until such time as the Company has clear approvals from all relevant government agencies,” they said.
The receipt of the letter from the Ministry of Social Protection and, consequently, the need to cease mining and processing activities were the trigger for the Company calling a Trading Halt of its securities in Australia on October 11 before moving to a voluntary suspension on October 15, 2019.
The company was critical of Scott’s action claiming that the stop order was inconsistent with normal protocols in such situations. Normal protocols they argue is to cordon off the area of the incident, being the Hicks 1 Extension Trench, a process the Company had already undertaken immediately after the death.
Having taken this action Troy expressed surprise at the ban which covered all mining areas including the Smarts 3 and Larkin Pits which are not where the incident took place.
Notably the company claimed that Scott possibly “chose to act as a knee-jerk reaction in response to extensive false and misleading information being circulated on social media by various groups and individuals concerning the accident and the safety record of the Company generally.”
They maintained that Troy, and its Directors, management and supervisors are strongly committed to the long-term health and safety of all its employees and that the Company provides significant occupational health and safety training, both at induction and on an ongoing basis at Karouni.
First serious injury
They stressed that after more than five million man-hours worked at Karouni since Troy acquired the operation in 2014, the recent death is the first serious injury sustained in the mining department with only one other occurring in the processing plant caused by a breach of safety protocols.
Additionally exactly five months ago on May 15, 2019, the company received a Workplace Award from the National Advisory Council on Occupational Safety and Health in Guyana “in recognition of the level of commitment towards creating a culture of prevention in your workplace” which was signed by the Minister for Social Protection, amongst others.
Further according to the company they are excellent corporate citizens as they provide local health services, with the 24-hour medical facility at Karouni as well as medivacs and other emergency services available not only to employees, but also to those in local communities.
According to Troy while every single safety incident is one too many they are proud of their safety record since mining is a relatively challenging activity.
Notably the company acknowledged that while the death of Ryan Taylor occurred at the Hicks 1 Extension Trench last week there have also been wall stability issues at the Smarts 3 Pit.
The Company recently undertook a significant cut-back of the northern face of the Smarts 3 Pit to initially access approximately 8,000 additional ounces of gold. Following this cut back the company has encountered ongoing stability issues “whether as a result of recent exceptionally high rainfall or otherwise”
Remedial efforts with the approval of the GGMC and Troy’s geotechnical consultants have been proceeding.
In light of these issues Troy has informed its shareholders that “significant uncertainty as to the future of operations at the Karouni Gold Mine” exists.
Troy Resources (ASX: TRY) is a small to midsize gold producer with a history of developing and operating mines in Australia and South America.
According to its website, it has been operating in South America since 2002. In July 2013 the Company acquired Azimuth Resources Limited which had discovered the Karouni Project in Guyana. The Company fast tracked development of Karouni with first gold production occurring in November 2015 with fiscal year 2017 being the first full year of production.
On October 8 Taylor was according to reports among miners working on the construction of a “bench” in a mining pit, when there was a slippage, which allegedly led to him falling and being covered by the rubble. A “bench” in the mining sector is referred to as a path created for a machine to access a mining pit.
Troy’s report of the incident states that at 2:25 am on night shift a newly-excavated three-metre-high embankment at essentially ground level upon which the Taylor was sitting, collapsed, bringing a “relatively minor amount of sand and rubble down on top of him.”
